A growing number of households in the United States are paying more than 30% of their incomes on rent, and policymakers at the local, state and even federal level are increasingly pursuing rent control measures as a solution to this growing housing affordability problem. However, countless studies over the years have found that rent control is counter-productive as a mechanism for addressing housing affordability problems.
For example, economist Ken Rosen of UC-Berkeley, in his 2018 report for the Fisher Center for Real Estate & Urban Economics, points out that “rent control is need-blind” and “fails to ensure that the benefits of lower rents help those most in need.” He further points out that rent control creates housing scarcity and penalizes a large and increasing number of would-be renters, as the rental housing supply is suppressed or shrinks. Moreover, rent control provides incentives for owners to convert existing rental apartment buildings to condominiums, and impedes and/or provides disincentives for new construction.
Addressing the housing affordability problem is complex and will require efforts on many fronts, but ultimately these efforts must involve more production of housing, not less. If housing demand outstrips supply, prices go up, and that is what has been happening in many parts of the United States in recent years.
Rent Control Legislation Activity by State
Additional information: https://www.nmhc.org/research-insight/analysis-and-guidance/rent-control-laws-by-state/
NAHB is unequivocally opposed to rent control in any form because it will defeat the housing goals set forth in the Housing Acts enacted by the Congress of the United States.
Why It Matters
NAHB strongly opposes rent control because it does not address the underlying issues that result in the lack of affordable housing and only creates more challenges, including reduced supply of available units and reduced income to states and municipalities because of slowed or halted development.
Housing affordability to a large degree is a regulatory and supply issue, and needs to be addressed by:
- Creating more and better housing by allowing more high-density housing,
- Reducing regulations and lawsuits that slow or stall housing development,
- Encouraging public/private financing and partnerships to encourage the development of affordable housing, and
- Offering direct public subsidies to help those that need it.
Instead of adding more regulations and risk via rent control, policy makers should be looking for ways to reduce regulations, remove barriers, and add incentives for developers to produce more housing, especially affordable and workforce housing.
Check out NAHBNow for the latest activity related to rent control.
- 2019 Rent Control and Inclusionary Zoning Alternatives Study — a study by Cushman & Wakefield that examines Chicago’s Affordable Requirements Ordinance (ARO)
- Rethinking Affordability in Chicago — Lessons from the affordable requirements ordinance, and alternatives for expanding access to housing
- Housing for All — NAHB’s policy initiative to address the root causes of the housing affordability crisis
- Rent Control Legislation Heats Up Amid Affordability Concerns (June 12, 2019) — NAHB examines existing and pending legislation regarding rent control
- NAHB Continues to Push Back Against Rent Control (Sept. 6, 2019) — NAHB coverage of AB 1482
- Downtown Revitalization Includes Upscale Affordable Housing Development (Aug. 20, 2019) — A recent example of a successful public/private partnership to develop affordable housing.
- NAHB Affordable Housing Group (formerly Housing Credit Group)
- Land Use 101 Toolkit
- The Effects of Rent Control Expansion on Tenants, Landlords and Inequality: Evidence from San Francisco — A 2019 Stanford University study that found rent control in San Francisco actually reduced rental housing supply.
- The Case for Preserving Costa-Hawkins: Three Ways Rent Control Reduces the Supply of Housing — A 2018 study that also found rent controls reduce housing supply in Southern California
- What does economic evidence tell us about the effects of rent control? — A Brookings Institute article examining new research on how rent control affects tenants and housing markets offers insight into how rent control affects markets
- The Rent Crisis Won’t Go Away Without More Housing — A Bloomberg article on why hot cities need to get serious about allowing more construction
- Why Rent Control Doesn’t Work — A Freakonomics podcast episode on why economists argue rent control is a bad idea, despite its popularity among politicians and the general public
- The Impacts of Rent Control: A Research Review and Synthesis — A 2018 study by the National Multifamily Housing Council (NMHC)
- Modeling the Impacts of Rent Control — A National Apartment Association (NAA) study examining the impacts of rent control in four major cities
- Up for Growth National Coalition